Formation Securities Notifies SEC of Solana Tokenized Stock Venue

Formation Securities, the firm created by the merger of Solana DeFi protocols Orca and Loopscale, has told the Securities and Exchange Commission it intends to run a market for tokenized U.S.-listed stocks on Solana under the agency's Innovation Exemption. The company published its notice on Nov. 9 and is targeting an early 2027 launch.

The filing is a notice of intended operations, not SEC approval and not a trading launch. The SEC order establishing the exemption requires venues to publish notice at least 30 calendar days before operating and to separately notify the agency within one business day. The SEC's Innovation Exemption page warns that even inclusion on its list of prospective venues does not establish compliance.

How the venue would work

Formation plans to start with tokenized shares of Exodus Movement, Forward Industries and Galaxy Digital. Trading would run around the clock from investors' own wallets, with shares and payment exchanged together in a single Solana transaction. The venue would use permissioned pools built on licensed Orca technology, and only approved wallets could trade or supply liquidity. Formation says it will not hold participants' assets or private keys.

The structure is far from open DeFi. Participants must pass identity, sanctions, AML and wallet checks, and need the tokenization provider's approval to hold or receive its shares. Formation also retains administrative powers over contracts, including upgrades, pauses and wallet permissions, and will not use onchain governance.

"Tokenized stocks will succeed only if public companies see the value in them, and we intend to build this market together with issuers"

Christopher Montagano, president of Formation Securities

Regulatory perimeter

Formation is a Delaware LLC wholly owned by Valcrest, Inc. Neither it nor the venue is SEC-registered for activities under the exemption. It will not operate an order book, extend credit or conduct primary offerings. Its notice says the venue will not be subject to Regulation NMS or the fair-access requirements that apply to registered exchanges and certain alternative trading systems.

The exemption covers eligible tokenized National Market System stocks, not synthetic products. It requires equivalent shareholder rights, such as voting and dividends, and limits symbols and trading volume. Stock tokenized by an unaffiliated third party needs a separate issuer notification and a period of at least 30 calendar days in which the issuer can object.

Tokenized shares are to be offered to verified investors through Superstate, Securitize, Formation's own platform, channels such as Alpaca, and custodians including Anchorage and BitGo Bank. Formation cited Solana's reliability, speed, low cost and support of more than $5 billion in tokenized real-world assets as reasons for its choice of chain.

A crowded field

Formation is not the first to file. Perpetuals.com's notice, whose revision log dates initial publication to Oct. 14, plans pools on Kronos X Public, an Ethereum-compatible Layer-2, and its website says trading has not commenced. By late October, at least three entities had submitted notices, including TSV LLC on Canton Network and OKXICE on X Layer.

OKXICE, the OKX and Intercontinental Exchange joint venture, has faced objections from 67 firms to tokenization of their shares, though the venue is not live. We covered its earlier SEC filing for a 24/7 tokenized stock venue on Uniswap v4. Issuer consent is the pressure point for any venue relying on third-party tokenization.

Securitize offers a contrast. It launched share-backed tokens on Solana in October through its registered broker-dealer platform and says that trading does not need the exemption. The exemption path trades registration for conditions; the broker-dealer route stays inside existing rules.

For Formation, the notice is a first step. The company still has to secure the licenses a venue of this kind requires before it can meet its early 2027 target.